Rajoy to oversee major shake-up in healthcare funding

The government of Mariano Rajoy is preparing to make radical changes in the way Spaniards pay into their health system.

According to sources close to the government, the administration believes that the current system is not economically viable. To defend their argument, government officials say that the public healthcare system is some 20 billion euros in debt. Regions administer healthcare using money suplied by central government.

Ana Mato, the health minister, has commissioned several studies to look at alternatives and help come up with a new financing model. The studies will be presented to all the regional health officials before the end of the month, government sources say.

One of the proposals, say government sources, aims to look at a co-payment plan, whereby Spaniards will pay a nominal fee for medical examinations, doctors’ visits and prescription drugs.

Even though Prime Minister Rajoy doesn’t favor the idea of making all Spaniards pay for healthcare, government sources say that the administration plans to leave the final decision on co-payment to each region.

Catalonia is the first and so far only regional authority that has ruled that its residents should pay a nominal fee — one euro — for prescriptions.

Because of the political costs involved, the government doesn’t want to publicly address what could become a question of cutbacks in healthcare. Instead, the administration’s policy is to refer to the changes as “transformations in the healthcare model.”

Government sources say that Rajoy has been discussing the changes from day one of his administration.

The changes will entail a complete new concept in financing, say sources.

However, the opposition Socialists are not keen on changing the way Spaniards pay into their health system. Elena Valenciano, the deputy secretary general of the Socialist Party, said that her members won’t approve any cutbacks to either health or education. “Education and health are the two areas that are not negotiable, and we will defend them to the end,” she said.

At the same time, government sources say that the Rajoy administration is prepared to announce new measures in an effort to calm the markets.

Last week, Spain endured one of its most volatile market sessions in months. The country’s risk premium rose to more than 400 basis points as investor confidence dropped. Financial analysts predict that Spain won’t be able to meet its goal of reducing its deficit from 8.5 percent of GDP to 5.3 percent by the end of the year.

In an interview last week with a leading German daily, the Frankfurter Allgemeine, Economy Minister Luis de Guindos hinted that far-reaching reforms will be made in “all public services, but above all in health and education.” He added that the Rajoy government is also proposing changing business laws, including rules governing professional services.

Several regions have already petitioned the government to draft changes to the laws affecting the manner in which they provide health coverage and allowing them to increase university fees.

As for the financial institutes, De Guindos has said that in the coming weeks the government will put Banco de Valencia and Catalunya-Caixa on the auction block. All of these reforms, De Guindos says are aimed at winning back investor confidence.

On Thursday, the Ibex 35 saw one of its most volatile sessions in weeks. After dropping to more than 100 points, the Spanish blue-chip bourse closed at its lowest level since March 2009.